We might have mastered booking flights and hotels with a superquick surf’n’click, but many of us are still coming a cropper when it comes to arranging a hire car. It may seem like the easiest piece in the holiday jigsaw — one to leave till the last minute. But beware: as well as prices varying enormously between companies, hiring a car can deliver a unique sting in the tail — the phantom post-holiday penalty charge.

What at first seems like a cracking bargain can turn into a costly mistake. We’re not talking about the odd tax or surcharge sneaked in when you return the car, but something altogether more depressing — from a £50 levy for not leaving the fuel tank full up to the thousands it could cost if you crash.

It pays to know exactly what you’re letting yourself in for, so here’s our guide to the pitfalls. Exact costs and practices vary so much from company to company that it is impossible to give a universal guide to every situation, but being armed with the answers to the following questions will keep you on the right road.

Q What is collision damage waiver (CDW), and do I want it?

A Yes you do. While third party insurance usually comes as standard, CDW covers damage to the car you’re driving. If you don’t take it out and you have a nasty prang, you could find yourself having to pay the total cost of a replacement. As a guide, Hertz vehicles cost from £6,300 to £61,000. Ouch.

Most companies quote rates that include CDW, but not all. It can be expensive — it will add about £130 per week to your car hire price in the United States, for example — but it’s worth every penny.

Q So if CDW is included, I’m completely covered against accidents?

A Even with CDW, you will have to pay the excess charge of any insurance claim. This add-on cost used to be modest, but not any longer. For UK rentals, Alamo, Budget and Hertz are typical in setting the excess at a holiday-ruining £500. For overseas hires, it can be even more — Hertz, for example, has an excess of £675 on its smallest cars in Portugal.

In the event of an accident, you have to pay this excess charge irrespective of who was at fault, which is incredibly unfair if a Portuguese boy racer bumps into you.

Q Is it worth insuring against having to pay the excess?

A It is possible to buy what’s called super CDW to reduce the excess. Whether this is worthwhile depends on your attitude to risk — and on which hire company you’re booking with. The deals available vary greatly: Avis charges a whacking £9 per day to reduce the excess to £200, while the daily extra with Budget is £6. At the other end of the scale, Holiday Autos and Carrentals.co.uk both charge just £2 a day extra to zap the excess to nil.

If you hire several cars over the course of a year, consider the annual insurance cover offered by Insurance4carhire.com (020 7012 6300, www.insurance4carhire.com). It works much like an annual travel insurance policy: for a flat fee, the company reimburses any excesses incurred during the year. Annual cover charges start from £49; compare that to the cost of reducing the ex- cess to zero on a typical week’s hire in Portugal, which would cost £46.

Q Are there things that I should know about that aren’t covered by insurance?

A Make sure to ask about damage to tyres, windscreens and the underside of vehicles, as these are rarely covered by hire-company insurance. The Insurance4carhire product does pay out for these extras.

Q Should I take out the personal-accident insurance?

A In almost all cases, the answer is no. You might feel confused and pressured if you are offered this when picking up a car after a long flight, but if you have your own travel insurance, you’ll be duplicating premiums.

Q Is it worth worrying about returning the car a few litres shy of fuel?

A Yes. It might seem like an unnecessary chore on your way to the airport, but you shouldn’t overlook it. If you don’t fill up, you may discover the company has charged a mark-up on the actual pump price when they filled the tank after you left. Almost all car-rental companies do this, while some may also add a flat-rate refuelling charge to this cost. Charges can mount up, so returning the car even a few litres short of full-full could mean facing a £50 bill long after you’ve returned home.

Q What if I want to share the driving with someone else?

A There’s almost always an additional fee for this, and it’s charged per extra name. Check whether it’s a flat rate or a daily charge. Avis, for example, adds £23.50 for each other driver — not so good for a group ski weekend or a villa rental — while others such as Alamo and National charge £2.94 per extra driver per day, which is a lot more economical over a weekend break.

Q What should I look out for when ordering an infant seat?

A Hire-car companies will rent you a baby seat, which is mandatory in many countries. Many offer them for a flat fee of about £23, others charge about £5 per day. For example, adding a toddler seat to a week’s Europcar rental in Spain will cost an extra £39. Airlines, even the low-cost ones, will carry a seat free of charge, providing it fits into your overall weight allowance, so it might be best to take one with you. Check that your seat is suitable for the model of car you’ll be driving — if it isn’t designed to fit, it won’t be safe.

Q Isn’t it a waste of time inspecting the vehicle with an employee, even though it’s brand new and undamaged?

A No. Always make sure that you and a hire-company employee give the car a once-over when you return it at the end of the hire period to check for any new damage. Although no reputable company would deliberately rip you off, mistakes do happen. Alleged minor prangs can end up costing hundreds.

Q Do all companies charge when you pick up a car in one place and drop it off in another?

A No, it depends on the company and the locations. Take the example of hiring a car in Birmingham, driving it down to London and then dropping it off at Heathrow. The total rates quoted for this varied from a bargain £30 with Alamo, right up to a less-amusing £90 with Avis. The difference in prices is down to the variation in drop-off charges, so do ring or click around.

For overseas hires, it’s a similar story. In the United States, for example, it’s generally true that there are no drop-off charges within the same state, but if you choose to pick up the car in one state and drop off in another, the charge ranges from £50 to £250.

Q I want an automatic. Will I always be able to get one?

A It depends on where you’re hiring, and how much notice you give. In the UK, National will guarantee to have an automatic available with four working hours’ notice. In Europe, coverage is patchier — they are particularly scarce in Italy — but CarRentals.co.uk reckons it can provide one from any of its 4,000 outlets worldwide and will confirm availability within 48 hours. Best of all is America, where almost all rentals are automatic.

Q Are there any other niggling snags that can be avoided?

A Make sure you take both the plastic and paper parts of your UK driving licence when you’re renting, otherwise you might face extra charges and possible refusal to rent.

Q And the biggest question of all: how can I find the best car-rental bargains?

A Our very own Travel classified section is a good place to spot the best deals. Then, hit the internet, where rates are usually lower than you find by phone. Holiday Autos, for example, has a week’s inclusive hire in South Africa from £179 by phone, or £140 on the internet. In general, you get a better deal by booking early and prepaying.

Also, check out offers from frequent-flyer clubs. Many have tie-ins with car-rental companies, giving preferential rates. They’re free to sign up to, you get a decent discount and they’ll give you reward points for future rentals or flights.

Some low-cost airlines also have agreements with rental companies, such as the one between Ryanair and Hertz. A three-day hire in Cork costs £83 if booked on Hertz’s website, but if you are flying into the city with Ryanair, the same booking through the Hertz page on Ryanair’s site is £68.